On December 18, 2019, the Food and Drug Administration
(“FDA”) issued a proposed rule (the “Proposed Rule”)
to amend its regulations to implement a provision of the Federal Food, Drug,
and Cosmetic Act to allow importation of certain prescription drugs from
Canada. The purpose of the Proposed Rule is to lower prices and reduce
out-of-pocket costs for American patients. If the Proposed Rule is
finalized as proposed, States or certain other non-federal governmental
entities and their co-sponsors, if any (collectively “Sponsors”),
would be able to submit drug importation program proposals (each a “Drug
Importation Proposal”) to the FDA for review and authorization.
If a Drug Importation Proposal were approved, it would be authorized for a
2-year period, with the possibility of extensions for additional 2-year
periods.

The Proposed Rule would require
each Drug Importation Proposal to:

Specify the eligible prescription drug the Sponsor
seeks to import;

Demonstrate that the proposed importation
program will pose no additional risk to the public’s health and safety;

Provide an explanation as to why the Sponsor
expects the importation program would result in a significant reduction in the
cost of such prescription drug to the American consumer; and

Identify the foreign seller in Canada that would
purchase the drug directly from its manufacturer and the importer in the United
States that would buy the drug directly from the foreign seller. The
foreign seller must be registered with the FDA as a foreign seller and be
licensed by Health Canada as a wholesaler, and the importer must be a State or
FDA licensed wholesale drug distributor or State-licensed pharmacist.

At least one State, tribal, or territorial governmental
entity would be required as a Sponsor of a Drug Importation Proposal to offer
enhanced accountability and to protect the public health. Co-sponsorship
is included in the Proposed Rule to allow the State, tribal, or territorial governmental
entity to benefit from the experience of pharmacists and wholesalers.

To be eligible to be imported, a prescription drug would
need to be approved by the Health Products and Food Branch of Health Canada
and, but for the fact that it deviates from U.S. labeling, also meet the
conditions in an FDA-approved new drug application or abbreviated new drug
application. Essentially, eligible prescription drugs are those that
could be sold legally on either the Canadian market or the American market with
appropriate labeling. An eligible prescription drug would need to be
relabeled with the required U.S. labeling, prescribing information, and patient
information before sold in the United States. Also, to be eligible for
importation, the prescription drug must be currently marketed in the
United States (which would allow the FDA to be better able to determine if
there is a safety issue with an imported drug). Several categories of
prescription drugs are excluded from the Proposed Rule including controlled
substances, biological products, infused drugs, intravenously injected drugs,
and drugs that are inhaled during surgery.

The FDA is seeking comments on the Proposed Rule until March 9, 2020. Stay tuned for updates as to whether or not the Proposed Rule is revised or finalized as proposed.